Hoteliers’ liability: Adeels Palace Pty Ltd v Moubarak (2009) NSWCA 29Author : Robin Shute

Public and Products Liability

The duty of care owed by a proprietor to patrons injured by criminal behaviour in a nightclub: the law consolidated and explained by the NSW Court of Appeal.

The liability of the licensee of a nightclub and restaurant to persons injured in a shooting was upheld by the Court of Appeal which found that there was no appealable error in the primary judge’s award to 2 patrons shot by another visitor on New Years Eve on 31 December 2002/1 January 2003.

The responsibility of occupiers for injuries to patrons is a vexed question.  We are seeing more and more the commencement of actions by patrons injured late at night in fights which have occurred often as a consequence of alcohol.  The extent of the obligations of the occupier to foresee and to prevent worse behaviour by the provision of appropriate security has been examined in a careful and illuminating leading judgment given by Giles JA.

Admittedly the facts were extreme.  The restaurant premises themselves had a licensed seating capacity of close to 300 persons.  The evidence was that the premises were œpacked out with possibly as many as 400 people present.  At about 2.30am a dispute erupted on the dance floor following which a male of Lebanese appearance appears to have picked a fight which then carried on in the kitchen.  He left the premises in order, it was found, to collect a gun.  Gun shots were then heard.  It emerged that the assailant had shot one patron in the leg and then a second patron was shot and badly injured.

The allegations of negligence were that the patrons were owed a general duty of care by the restaurant to take care to avoid injuries caused by the unlawful actions of patrons on the premises.  It was said that the duty was breached because the security arrangements of the function were œfar short of what reasonable care and skill required in all the circumstances.

At first instance the injured parties were successful in recovering damages collectively of approximately $1.2 million.   The Trial Judge held that the inadequacy of the security materially contributed to, and so caused, the injuries.

At the heart of the case was whether a duty of care arose.  In the decision of Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) HCA 61, the occupier of a supermarket car park was held not to owe a duty of care in relation to the criminal conduct of third parties.  An attack in the car park had occurred involving violent and criminal behaviour.  So in this case it was argued that the occupier of premises did not owe a duty of care in relation to the shooting as it involved disassociated serious criminal activity.   It was submitted that the cases in which occupiers of licensed premises were held to have had a duty of care in relation to the prevention of violent criminal acts were inconsistent with Modbury.  The Court had no real difficulty in distinguishing Modbury as has in fact occurred in a number of other cases.  The duty of care, the Court said, involved more complex factors including the degree of foreseeability and predictability of events involving criminal conduct arising.  Specifically the basis of the duty:

œ¦must be found in the level of control exercised by the occupier over those on the premises and the occupier’s knowledge, or ability to know about, the condition of persons on the premises where liquor is being sold¦.

The Court took particular note of a Victorian decision called Club Italia (Geelong) Inc v Ritchie.  In that case the Court focused upon the issue of harm œarising from a state of affairs created by the Club.  The question of duty also arose from the capacity of the occupier to control the conduct of persons within the Club.

This ability was ordinarily exercised by the presence of security staff.  The Court at first instance made a number of findings that the security staff were inadequate in number.  It appears that there were only 2 security staff and for an unknown reason only one was on duty at the time of the shooting.  Evidence was given by experts that the guard on duty could not conceivably have carried out all the necessary preventive and security intervention measures which ought to be necessary.  Proper security should have prevented the person doing the shooting from gaining entry to the premises with the gun.  He should have been properly searched “ particularly as it seems he left the venue in order to get the gun from his car.  More security might well have prevented the turn of events.

The Court had no difficulty in finding that the conclusions of the Trial Judge ought to be upheld on the question of the existence of a duty of care.

Not all injuries in pubs or restaurants will succeed.  The case is thus of interest for showing how, in the future, potential plaintiffs can establish foreseeability of injury and that the owner had the capacity to influence events.  In laying down the test of foreseeability the Court recognised that there may very well be circumstances where the injury which occurred was genuinely œunexpected and something which could not have reasonably been foreseen by the occupier.

In this particular case the Court at first instance seems to have been taken to both the history of the locality in which the restaurant was situated and to the actual police records by way of showing previous incidents over a lengthy period of time.   The injured parties were thus able to build a picture of the restaurant being one in which, from the standpoint of the objective observer, one could conclude that there was a probability of incidents happening, thus making it desirable for effective security to be available.

The Court also looked closely at the nature of the restaurant and that it was œdeliberately calculated to attract patrons to the premises.   ˜The type of activities carried on there involved numerous people gathering in close proximity to each other, at least predominantly for the purpose of social interaction, over many hours, in circumstances where alcohol was readily available.   Alcohol therefore was another reason why the duty of care should exist even though it did not play a prominent part in this case, other than, as background, that patrons might be potentially troublesome and violent.

The question of effective security is at the heart of the duty of the occupier having the requisite capacity to control conduct.   Adequate security is a function of expert evidence and what is reasonable in all the circumstances.   In this case, the Court found a breach.  The security guards did not give evidence, allowing the Judge to draw adverse inferences.  Furthermore, self-evidently, one or two security guards were not enough to control a venue of 300 people in the event that trouble broke out.  The Court did not make any conclusion of what the correct number of guards may be because adequacy of security is a question of fact in all the relevant circumstances.

Even so, it was also argued at the appeal that any absence of security guards was not causative of the loss since security guards could not have done anything to stop a shooting.   The Trial Judge made findings of fact which the Court of Appeal held were open to the Judge on the evidence he heard.  Thus the Court of Appeal declined to interfere with the finding of causation, believing that security may well have a made a difference.

Most cases which come forward involve fights or injuries in nightclubs and restaurants rather than shootings.  A shooting is at the extreme end of criminal conduct, but it will be seen that the Court of Appeal was prepared to uphold such extreme conduct as being both foreseeable and conduct over which there was capacity to control.   The case reflects society’s increasing intolerance of public displays of improper behaviour.   The case underlines the way in which the Courts will make every effort to ensure that providers of recreational facilities control behaviour so as to ensure safety for all patrons.